Jaguar Land Rover Earnings Lower - On Success of Evoque?
Smaller Margins On Volume Model Affecting Bottom Line
It seems news related to Land Rover's latest wunderkind, the Range Rover Evoque, has been nothing but positive lately. The avant-garde compact SUV has won multiple awards from around the world, and global demand for the chic new compact model is so strong, that Land Rover's Halewood assembly plant has been running 24-hour shifts to try to meet demand.
But, ironically, the very success of the Evoque has had a negative impact on Jaguar Land Rover's bottom line. The Evoque accounted for nearly 30 percent of the brand's sales in the second quarter of 2012, and during that same time, the brand's profit margin on sales declined. The Evoque is one of the lower-priced models in the Land Rover Line, with topline fullsize Range Rover and Range Rover Sport models for going for twice as much or more.
The company also points to currency fluctuations as part of the reason for its poorer financial performance. The company is planning to build a factory in China in conjunction with Chinese automaker Chery to meet strong demand in that market, and also recently signed a letter of intent with the Saudi Arabian government for a factory in the desert kingdom as well.